Halliburton Q2 Earnings Preview: Here's What You Should Know

Halliburton Company HAL is set to release second-quarter results on July 22. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 56 cents per share on revenues of $5.4 billion.

Let’s delve into the factors that might have influenced the oilfield service firm’s performance in the June quarter. But it’s worth taking a look at HAL’s previous-quarter performance first.

Highlights of Q1 Earnings & Surprise History

In the last reported quarter, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells met the consensus mark, reflecting softer activity in the North American region, partly offset by international growth. Halliburton reported adjusted net income per share of 60 cents, same as the Zacks Consensus Estimate. Revenues of $5.4 billion beat the Zacks Consensus Estimate of $5.3 billion.

HAL beat the Zacks Consensus Estimate once in the last four quarters and matched in the other three. This is depicted in the graph below:

Halliburton Company Price and EPS Surprise

Halliburton Company price-eps-surprise | Halliburton Company Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 30% fall year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 6.7% decrease from the year-ago period.

Factors to Consider

Despite sequential revenue growth in the first quarter of 2025, Halliburton's North America business remains under pressure due to weaker commodity prices and customer uncertainty. Due to this soft operating environment, we expect sales from the region to be $2.3 billion, suggesting a 6.6% drop on a year-over-year basis. This is likely to have weighed on the company’s earnings and cash flows.

Going by our model, the company’s second-quarter gross profit is likely to be $846.8 million, down almost 25% from the year-ago period. The downward income trajectory could be attributed to a sharp margin decline in its Drilling & Evaluation division. Our operating margin estimate is pegged at 13.8%, implying a decline of 280 basis points.

However, as a respite to the company, its pivot to digitalization and integrated services is gaining traction. The company’s Zeus IQ platform, an autonomous, closed-loop hydraulic fracturing system, marks a significant step forward in automation and efficiency. By utilizing real-time reservoir feedback to guide fracturing without human intervention, Zeus IQ enhances well productivity and safety. This not only deepens client relationships but also ensures more stable and recurring revenues.

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for Halliburton for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of a beat. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.29%.

Zacks Rank: HAL currently carries a Zacks Rank #5 (Strong Sell).

Stocks to Consider

While an earnings beat looks uncertain for Halliburton, here are some firms from the energy space that you may want to consider on the basis of our model:

Valero Energy Corporation VLO has an Earnings ESP of +1.22% and a Zacks Rank #3. The firm is scheduled to release earnings on July 24.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, the Zacks Consensus Estimate for Valero Energy’s 2025 earnings has moved up 3.3%. Valued at around $47 billion, Valero Energy has lost 3.1% in a year.

Ovintiv Inc. OVV has an Earnings ESP of +2.34% and a Zacks Rank #3. The firm is scheduled to release earnings on July 24.  

Ovintiv beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 27.8%. Valued at over $10 billion, Ovintiv has lost 17.8% in a year.

Phillips 66 PSX has an Earnings ESP of +4.25% and a Zacks Rank #3. The firm is scheduled to release earnings on July 25.

Phillips 66 beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, the average being 10.6%. Valued at more than $52 billion, Phillips 66 has lost 10.2% in a year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research